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Monday February 19th 2018

How Flexible is Chapter 13 Bankruptcy?

Before filing for bankruptcy, it is vital to comprehend each of the facts. Since you’ll not be knowledgeable in bankruptcy law, the questions you could have concerning the process have answers which can be anything but clear. Not only are there various kinds of bankruptcy, Chapter 7 and Chapter 13, but there are also significant differences between the two.

One of the most typical questions on Chapter 13 bankruptcy is what happens in case your financial situation changes through the duration of the plan? In the end, a Chapter 13 plan typically runs between three to five years and there are numerous things that may happen in that time frame. What happens while you or your spouse lose a role, fall ill or in an accident and incur medical expenses, or have a metamorphosis in family size?

Fortunately, Chapter 13 bankruptcy offers numerous flexibility within the event of a transformation of income or expenses throughout the duration of the plan. Typically the court can conform to modify your plan to make it work. This often involves a lowering of monthly payments which debtors are obligated to pay.

Other times, the changes might have to be made even before a first payment is distributed. Sometimes debtors are still unable to pay their mortgage inspite of the restructuring of their debt in Chapter 13. In cases like this, a modification is important. If the placement that you just are experiencing is barely a quick-term problem, the court may grant a moratorium in payments if it’s going to allow you a possibility to recover from an illness, one-time expense, or some other temporary cash flow problem.

If your situation changes significantly for the more severe, Chapter 13 has what is termed a “hardship discharge”. This happens when a Chapter 13 plan is confirmed but circumstances come up that prevent the debtor from completing the plan. However, there are stipulations to a hardship discharge which make it available only if: the failure to pay comes from circumstances beyond the debtor’s control, creditors have received as a minimum as much money as they might have received under Chapter 7 where assets are liquidated, and if modification of the plan is impossible.

Bankruptcy will be complicated, that’s why you want an attorney who can get things right the first time. A lawyer who works exclusively on bankruptcy and keeps up with the latest trends within the industry can put that knowledge to give you the results you want. Let’s face it, unemployment, garnishments, and repossessions can happen to anyone. When bad things happen to good people, and you might be filing for bankruptcy in NY, the bankruptcy attorneys at Doyaga and Schaefer are here to assist. Stop the harassment, the concern, the financial stress. For a free same-day consultation, call 718-488-7500 or 516-656-7500, or visit our website at bigapplebankruptcy.com for additional information.

How to File  ($19)

This book has been my light at the end of the tunnel. It took me approximately 4 wks. to research the book and understand it so I didn’t make any mistakes in filing inaccurate information but once I did the paperwork (all through the mail) it only took 1 wk. before the creditors meeting was set for 3 wks. later and the entire chapter 7 should be done within about 3 months. I was the only one present at my meeting without an attorney but my meeting as well as the 15 people before me only took 5 minutes each in front of the trustee. None of the creditors in any of the cases showed up except Sears in other cases but they just noted the information for their records. This is possible to do by yourself and for approximately 5.00 administrative and filing fees. No other costs have been incurred and I am on my way to a new start. Thank you so much!

Bankruptcy  ($34)

I was looking for a dvd to hand out to my consumer bankruptcy clients, and this looked ideal.

The topics covered include a discussion of Chapter 7 vs. Chapter 13 vs. Chapter 12 vs. Chapter whatever, and the homestead exemption, and how to calculate equity in a house.

It discusses vehicles and the way that some taxes can be discharged under some circumstances, and various exceptions to the discharge.

The format is a simple one: two lawyers sit across a desk from each other and one asks questions about bankruptcy, and the other one answers. The lawyers work pretty well together in a question and answer format, and most of the discussion is pretty clear, if very general.

THE PROBLEM WITH THE VIDEO is simple: it relates to the period PRIOR to the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. And after the hour of q and a, there’s a very short appendix with short discussions of the changes in the law.

Is the dvd useless? Absolutely not. It provides a potential debtor with an overview of vocabulary, a discussion of calculating equity in a house, a discussion of the way a trustee in bankruptcy might treat a car in a Chapter 7 case, and other valuable items of information.

But the decision the producers made, to adapt to the changes in the law by just putting in a scrolling appendix at the end of the dvd which discusses in summary fashion the major changes in the post 2005 bankruptcy world is just plain….not perfect.

There! I said it! I won’t equivocate on this!

Still, if a potential debtor watches this prior to visiting with an experienced, board-certified, AV rated bankruptcy lawyer, or an[…] 10 rated bankruptcy lawyer, they’ll both save some time, and that is a good thing.

For a potential debtor who wants to invest a couple of dollars and a little more than an hour in watching a discussion of major topic areas in bankruptcy law, this is not bad. It’s not precise enough for anybody to rely on as a serious reference, but as an overview, and a summary, and a first look at the law (assuming that the viewer watches and understands the scrolling update at the end of the dvd), it’s not bad.

Note that the exemption list at the end of the dvd is both limited (to cars and houses) and obsolete. But information about exemptions is thick on the internet.

Note: DO NOT rely on this dvd to make major life decisions; it’s not adequately detailed or precise. While it’s a pretty decent overview, and while I hope they come out with a sequal that squarely discusses the CURRENT version of the law, you should NOT rely on this for a bet-the-house decision-making session.

p.s. as I write this postscript, there is a raging debate in Congress over a provision in the Bankruptcy Code that may, after amendment, permit the stripdown of some OR all mortages on residential real property. Will that statute pass? Listen, I’ve practiced bankruptcy law in Phoenix, Arizona for about thirty years, and I’ve watched a long series of amendments to the “New Code” of 1979; and I’ve watched as Congress debated in the past. The 2005 amendments took about a decade to work their way through Congress. So MAYBE the Bankruptcy Code is about to change a lot. And MAYBE it’s not. But if you’re contemplating bankruptcy in Phoenix, Arizona, or anywhere else, you should be aware that the law is currently MAYBE about to change in a way that could be helpful to debtors, IF they qualify and are willing to put up with a Chapter 13 bankruptcy (which makes a root canal look like fun).

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